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Canadian Mineral Production

Information Bulletin, March 2017

(published in March 2017)

Canadian Mineral Production in 2016

The mining industry is a pillar of the Canadian economy and supplies the raw materials needed to produce many of the consumer goods we rely on in our daily lives, as well as those of the future, from utensils and hand tools to smartphones and electric cars. This information bulletin provides an overview of Canada’s mineral productionFootnote 1 in 2016.

The total value of Canadian mineral production in 2016 was $40.8 billion, 4.7% lower than the 2015 value of $42.8 billion. Results for individual commodities varied. As shown in Table 1, gains in the production values of metals and coal were offset by losses in the production value of nonmetals.

Canada’s top five mineral products by value for 2016 were gold, copper, potash, iron ore, and coal. Their combined value was $24.0 billion, accounting for almost 60% of the total value of mineral production.

The production value for each commodity reflects levels of output, prices, and exchange rates. Variations stem from changes to each of these factors. Over the past few years, the lower value of the Canadian dollar relative to the U.S dollar has been favourable for domestic producers since most raw mineral products are priced in U.S. currency.

At the end of 2015, mining companies were facing some of the lowest commodity prices since the peaks reached in 2011. In 2016, commodity prices experienced mixed results. The year started with optimism as gold prices rallied, silver followed, and base metals made up some of the losses from the previous year. Price gains for iron ore and metallurgical coal also came as a surprise to many observers; however, potash and uranium did not fare as well.

Metals

The value of metallic mineral production remained steady in 2016 at $23.2 billion, although Table 1 reveals mixed results among major commodities.

Iron ore, which experienced the greatest production value decline in 2015, was among the top gainers in 2016 with a 31.5% increase. Iron ore prices doubled during the year from very low levels because of strong demand from China.

Copper and nickel production values were down 9.2% and 16.4%, respectively, because of price declines as output remained stable. The production value of zinc was up 25.5% due to higher volumes (6.9%) and prices.

High gold prices in 2016 resulted in an 8.8% increase in its production value, offsetting a 3% decline in output. With a production value of $8.3 billion, gold remained the top-ranked commodity.

Following notable growth in 2015, uranium’s value of production declined 30.5%, largely a result of declining prices, but also the result of a 6.5% decrease in volume. Globally, Canada continued to rank second in uranium production.

Nonmetals

The value of nonmetallic mineral production was down 15.4% in 2016 to $14.0 billion.

Potash remained the top-ranked nonmetallic commodity despite a 36.6% drop in the value of mine shipments to $3.9 billion in 2016. Gains in the previous year were more than offset in 2016 as prices were down 26.2% year over year. The decline was attributed to excess capacity that caused some miners to suspend operations. This is reflected in the volume of production, which was down 11.4% in 2016. Canada remained the world’s largest potash producer.

The volume and value of Canadian diamond production were both down in 2016 to approximately 11.1 million carats and $1.6 billion, respectively.

Sand and gravel experienced notable gains in both value and volume of production in 2016, up 43.9% and 38.4%, respectively.

Salt experienced declines of 30.7% in its value and 32.9% in its volume in 2016. Salt demand varies according to winter weather conditions relative to forecasts. Based on the accuracy of forecasting the severity of the coming winter, surpluses (leading to increased inventories) or shortages (leading to price increases) may occur.

Coal

Following three years of sustained declines, Canada’s overall value of coal production finally reversed course and recorded 13.7% growth, reaching $3.6 billion in 2016. Although Canada produces both thermal and metallurgical coal, the latter had the most impact on its production value. Between a cyclical high in 2011 and 2015, the realized export price of metallurgical coal declined by 66.2%, but in 2016, prices increased 25.6% from the previous year.

Provincial and Territorial Perspectives

Ontario led all jurisdictions with a mineral production value of $10.6 billion, accounting for one-quarter of the Canadian total (Table 2). On the strength of gold and iron ore, and the weakness of potash and uranium, Quebec ($8.3 billion) reclaimed second place while Saskatchewan ($5.5 billion) was ranked fourth behind British Columbia ($6.3 billion). These four provinces accounted for three-quarters of Canada’s total value of mineral production in 2016.

Sources: Natural Resources Canada; Statistics Canada.
– Nil; (p) Preliminary.
(1) Includes coal.
Notes: Numbers may not add to totals due to rounding. Production is based on shipments. For full details of the methods used in computing the mineral production of Canada, please refer to www.nrcan.gc.ca/mining-materials/statistics/8848.